The Walt Disney Company saw its stock price target slashed by more than $30 from a Wells Fargo analyst who cited the troubled studio’s many problems, including mounting box office failures and streaming losses.
Adding to downward pressure on the stock, the analyst also predicted Disney will have trouble selling off many of its cable and broadcast TV assets — which include ABC, FX, and National Geographic — as consumers continue to cut the cord by the millions, signaling the eventual demise of cable TV.
Wells Fargo analyst Steven Cahall cut his stock price target on Disney by $36, to $110 from $146.
“Disney is not a hit factory of late, and content improvement takes a lot of time. Disney’s box office and Disney+ [subscriptions] will suffer, especially amidst price increases,” he wrote in his report Tuesday, according to a summary in The Hollywood Reporter.
Disney has experienced an unprecedented string of box office flops this year, including The Little Mermaid, Indiana Jones and the Dial of Destiny, Elemental, and Haunted Mansion. On the streaming side, Disney+ recently reported losing 300,000 domestic subscribers for the most recent quarter — an ominous sign for a still-young streamer that should be gaining customers.
Disney is also hiking streaming prices across the board, which is further alienating fans. The company is jacking up Disney+’s monthly subscription price to $13.99 from $10.99 — a 27 percent increase. Last year, the price rose to $10.99 from $7.99, which means Disney+ subscribers will see their monthly bill climb a total of 75 percent in less than two years.
The news prices will take effect in October.
Earlier this year, Disney CEO Bob Iger strongly hinted he is looking to sell off many of the company’s TV assets, which he described as “non-core” to Disney’s business. The move comes in response to continued cord cutting that has decimated the cable industry.
But selling off formerly robust channels including ABC and FX may not be easy. “Disney won’t be able to successfully divest non-core linear,” the Wells Fargo analyst wrote. The transition of ESPN to streaming is also likely to face turbulence and could hurt earnings.
Still, Wells Fargo retained its “overweight” rating on Disney, saying investors are already well aware of all of the bad news.
As Breitbart News reported, Disney is drowning in a sea of bad news cycles, including financial woes that have led to the layoff of 7,000 workers and its ongoing culture war battles over the studio’s insistence on pushing the radical LGBTQ agenda on children.
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